Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 1984, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1984
CHAPTER 583-H.F.No. 1775
An act relating to energy and economic development;
energy and economic development authority; adding
definitions; clarifying duties and powers of the
energy and economic development authority; correcting
statutory references; amending Minnesota Statutes
1982, sections 116J.88, as amended; 116J.89,
subdivision 4; 116J.90, by adding a subdivision;
116J.91, subdivisions 15, 17, 18, and by adding a
subdivision; 474.01, subdivisions 7 and 7a; Minnesota
Statutes 1983 Supplement, sections 116J.89,
subdivisions 1, 1a, 1b, 1c, 2, 6, and 8; 116J.90,
subdivisions 1, 2, 3, 5, and 6; 116J.91, subdivisions
1, 4, 11, 12, 16, 19, and 20; 116J.923, subdivision 7;
116J.924, subdivision 3; 116J.925, subdivisions 1 and
3; 275.125, subdivision 12a; Laws 1983, chapter 323,
section 5, subdivision 2; proposing new law coded as
Minnesota Statutes, chapter 116M; repealing Minnesota
Statutes 1983 Supplement, sections 116J.922; 116J.923,
subdivisions 2 and 12; and 116J.924, subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1982, section 116J.88, as
amended by Laws 1983, chapter 289, sections 63, 64, 65, 66, 67,
68, and 69, is amended to read:
116J.88 [SMALL BUSINESS FINANCE AGENCY, MINNESOTA ENERGY
AND ECONOMIC DEVELOPMENT AUTHORITY; DEFINITIONS.]
Subdivision 1. [SCOPE.] Each term defined in this section
has the meaning given it whenever used in sections 116J.63 and
116J.88 116J.875 to 116J.91 116J.926.
Subd. 2. [AUTHORITY.] "Authority" means the Minnesota
energy and economic development authority created in section
116J.89.
Subd. 3a. [BUSINESS.] "Business" means any person engaged
in a trade or business of any nature that is operated for profit
or not for profit.
Subd. 4. [ELIGIBLE SMALL BUSINESS.] "Eligible small
business" means an enterprise determined by the authority to
constitute a small business concern as defined in regulations of
the United States small business administration pursuant to
United States Code, title 15, sections 631 to 647, as amended
from time to time.
Subd. 4a. [PERSON.] "Person" means any person, including
individuals, firms, partnerships, associations, societies,
trusts, public or private corporations, or other legal entities,
including public or governmental bodies as well as natural
persons. "Person" includes the plural as well as the singular.
Subd. 5. [TARGETED SMALL BUSINESS.] "Targeted small
business" for the purpose of section 116J.90, subdivision 5,
means a business entity organized for profit, including but not
limited to any individual, partnership, corporation, joint
venture, association, or cooperative, which entity business:
(a) has 20 or fewer full-time employees or not more than
the equivalent of $1,000,000 in annual gross revenues in the
preceding fiscal year; and
(b) is not at least 20 percent owned by a business dominant
in its field of operation, or by partners, officers, directors,
majority stockholders, or their equivalent, of a business
dominant in its field of operation. For the purpose of this
subdivision, "dominant in its field of operation" means having
more than 20 full-time employees and more than $1,000,000 in
annual gross revenues.
"Targeted small business" includes may include a farm
business engaged in farming, agricultural production or
processing, or storage of agricultural products.
Subd. 6. [FINANCIAL INSTITUTION.] "Financial institution"
means a bank, bank or trust company, trust company, mortgage
company, credit union, mortgage banker, national banking
association, savings bank, savings association, savings and loan
association, building and loan association, insurance company,
securities broker-dealer, financial organizations relating to
commercial credit or venture capital, or a lender certified by
the secretary of housing and urban development or by the
administrator of veterans affairs, or approved or certified by
the administrator of the farmers home administration or any
other financial or lending institution, whether organized under
federal law or the laws of any state of the United States, and
whether located within or without this state.
Subd. 6a. [LOANS.] "Loans" means any of the following
types of loans: business loans, small business loans, pollution
control loans, energy loans, and farm loans.
Subd. 7. [BUSINESS LOAN.] "Business loan" means a loan,
other than a pollution control loan, energy loan, or farm loan,
to the owner of an eligible small a business for the financing
of (a) capital expenditures, on an interim or long-term basis,
for the acquisition or improvement of land, acquisition,
construction, rehabilitation, removal, or improvement of
buildings, or acquisition and installation of fixtures and
equipment useful for the conduct of the business, including all
facilities of a capital nature useful or suitable for any
business engaged in any enterprise promoting employment (or any
of the other purposes listed below), including, without
limitation, those facilities included within the meaning of the
term "project" as defined in section 474.02, subdivisions 1 to
1f and section 474.03, subdivision 4; or
(b) short-term costs of conducting an eligible small
business.
Subd. 7a. [FARM LOAN.] "Farm loan" means a loan to a farm
business for the acquisition, installation, improvement,
construction, rehabilitation, or removal of buildings, or
acquisition and installation of fixtures or equipment, useful
for the conduct of a farm business.
Subd. 8. [POLLUTION CONTROL LOAN.] "Pollution control
loan" means a loan to an eligible small a business for the
acquisition, construction, or improvement of pollution control
facilities or operations. Pollution control facilities or
operations may include real and personal property likely to help
prevent, reduce, abate, or control noise, air, or water
pollution or contamination by removing, altering, disposing, or
storing pollutants, contaminants, wastes, or heat, and real and
personal property to be used for the collection, storage,
treatment, utilization, processing, or final disposal of solid
or liquid waste.
Subd. 9. [FUND FUNDS.] "Fund" "Funds" means the group of
funds controlled by the authority, including the economic
development fund created by section 116J.89, subdivision 1c, the
energy loan insurance fund created by section 116J.924, and the
energy development fund created by section 116J.925.
Subd. 10. [ENERGY LOAN.] "Energy loan" means a loan or
advance of credit, to finance a "qualified energy project" as
defined in this section.
Subd. 11. [SMALL BUSINESS LOAN.] "Small business loan"
means a loan to a business that is an "eligible small business"
or a "targeted small business" for the financing of (a) capital
expenditures on an interim or long-term basis for the
acquisition or improvement of land, acquisition, construction,
rehabilitation, removal, or improvement of buildings, or the
acquisition and installation of fixtures and equipment useful to
conduct a small business, including all facilities of a capital
nature useful or suitable for any business engaged in any
enterprise promoting employment including, without limitation,
those facilities included within the meaning of the term
"project" as defined in section 474.02, subdivisions 1 to 1f and
section 474.03, subdivision 4; or (b) short-term costs of
conducting a small business.
With respect to financing the capital expenditure or
facility or short-term costs, if the authority determines that
the expenditure, facility, or costs will accomplish one or more
of the following purposes: tend to maintain or provide gainful
employment opportunities within or for the people of Minnesota;
aid, assist, and encourage the economic development or
redevelopment of any political subdivision of Minnesota; or
maintain or diversify and expand employment promoting enterprise
within Minnesota.
Subd. 12. [CONSERVATION.] "Conservation" means a product
or system designed to reduce the amount of energy needed for an
energy-consuming activity or process. Conservation includes but
is not limited to thermal insulation and air infiltration
control in buildings, products, or methods that reduce energy
consumption for transportation or soil tillage practices,
improvements in combustion efficiency or heat transfer
efficiency in boilers, furnaces, or direct-fired process
heaters, and changes to industrial production equipment that
result in lower energy use per unit of output.
Subd. 13. [MUNICIPALITY.] "Municipality" means a city,
town, county, school district, special taxing district, or a
municipal power agency governed by chapter 453, or a group or
combination of those units operating under an agreement to
jointly undertake projects authorized by sections 116J.921 to
116J.926.
Subd. 14. [ALTERNATIVE ENERGY RESOURCE.] "Alternative
energy resource" means a source of energy available from
indigenous Minnesota resources including but not limited to
peat, biomass, solar energy, wind, municipal wastes,
agricultural or forestry wastes, hydropower, and agricultural
crops suitable for conversion to an energy fuel.
Subd. 15. [RENEWABLE ENERGY RESOURCE.] "Renewable energy
resource" means a source of energy occurring in Minnesota which,
when consumed for energy purposes, is replaced within a matter
of days, months, or years by new or additional supplies of the
energy source. Renewable energy resources include, but are not
limited to, forestry products and forest harvest residues, solar
energy, wind energy, waterpower, and agricultural wastes.
Subd. 16. [ENERGY RECOVERY.] "Energy recovery" means the
extraction of energy from materials, components, or processes
which would normally represent wasted energy resources.
Municipal solid wastes, volatile sewer gases, and power plant
waste heat, among others, offer the potential for energy
recovery.
Subd. 17. [RESOURCE RECOVERY.] "Resource recovery" means
the cost effective collection, extraction, or reuse of resources
from materials, components, or processes which would normally
represent wasted resources or energy, such collection,
extraction or reuse to result in a lesser energy intensity than
would be required to produce the same product from any non-waste
materials.
Subd. 18. [QUALIFIED ENERGY PROJECT.] "Qualified energy
project" means acquiring, installing, rehabilitating or
constructing land, buildings, capital improvements, or equipment
for (1) conservation of energy or use of alternative or
renewable energy resources in the operation of a business, (2)
recovery or production from alternative or renewable resources
of energy to be sold in the course of business, (3) production
for sale in the course of business of equipment for the
conservation or recovery of energy or for the use of energy from
alternative or renewable resources, (4) creation of facilities
to manufacture or fabricate devices and equipment for the
conservation or recovery of energy or to obtain energy from
alternative or renewable energy resources, if the equipment is
for sale in the course of business, (5) manufacture of products
by means of resource recovery for sale in the ordinary course of
business.
Sec. 2. Minnesota Statutes 1983 Supplement, section
116J.89, subdivision 1, is amended to read:
Subdivision 1. [CREATION; SUCCESSOR STATUS.] The small
business finance agency created by Laws 1980, chapter 547, is
renamed the Minnesota energy and economic development authority
and may act on behalf of the state within the scope of the
powers granted to it in sections 116J.88 116J.875 to 116J.91
116J.926 to implement loan programs and to provide financial
assistance under the economic development fund funds by which,
the authority alone or in cooperation with cities, towns,
counties, and private or public lenders, may provide adequate
funds or incentives to financing such as guarantees or insurance
on sufficiently favorable terms to assist and encourage the
establishment, maintenance, and growth of eligible small
businesses and or employment opportunities in Minnesota, and to
reduce to a manageable level the cost of the control of
pollution and disposal of waste resulting from the operations of
eligible small businesses and to improve the efficiency of
energy use by businesses and to encourage businesses to provide
a reliable and economic supply of energy for use by the state's
households, business establishments, and municipalities, through
energy conservation, the production or recovery of energy from
alternative or renewable energy resources, or the production of
equipment or products which conserve, produce, or recover energy.
The authority so named is the legal successor in all
respects of the small business finance agency as originally
named and constituted and all bonds, resolutions, contracts, and
liabilities of that original agency are the bonds, resolutions,
contracts, and liabilities of the authority as so renamed and
reconstituted.
Because of its ability to pool or combine loans to be
funded from one or more issues of bonds, whether or not the
interest on the bonds is exempt from federal income taxes, the
authority will be able to spread its financing costs among the
eligible small businesses to which the authority provides
financing recipients of its financial assistance, thereby
reducing the costs incurred by each eligible small business to
the recipients of the authority's financial assistance.
Sec. 3. Minnesota Statutes 1983 Supplement, section
116J.89, subdivision 1a, is amended to read:
Subd. 1a. [USE OF ECONOMIC DEVELOPMENT FUND FUNDS.] In
addition, The authority may use the energy loan insurance fund
as provided in section 116J.924. The authority may use the
economic development fund in connection with small business
loans, pollution control loans, and farm loans to provide
financial assistance to eligible small businesses; it may use
the economic development fund in connection with business loans
when the loans are made as a part of the special assistance
program under section 116J.90, subdivision 5a; and the authority
may use the energy development fund in connection with energy
loans to provide financial assistance to businesses; as follows:
(a) to provide loan guarantees or insurance, in whole or in
part, to eligible small businesses in connection with business
loans, small business loans, energy loans, farm loans, or
pollution control loans;
(b) to provide direct loans to eligible small businesses in
connection with business loans, small business loans, energy
loans, farm loans, or pollution control loans;
(c) to participate in other investment programs as
appropriate under the terms of sections 116J.65, 116J.67,
116J.88 116J.875 to 116J.91 116J.926, and chapters 472 and 474;
(d) to purchase loan packages made to eligible small
businesses by financial institutions in the state in connection
with business loans, small business loans, energy loans, farm
loans, or pollution control loans;
(e) to enter into or to pay fees on insurance contracts,
letters of credit, municipal bond insurance, surety bonds, or
similar obligations and other agreements or contracts with
financial institutions or providers of similar services;
(f) to guarantee or insure bonds and notes issued by the
authority, in whole or in part;
(g) to make interest subsidy payments on behalf of eligible
small businesses to be applied to the payment of interest on
bonds or notes of the authority equal to the difference in
interest payable on loans and the interest payable on bonds or
notes of the authority where the proceeds of these bonds or
notes are used to make or participate in making these loans;
(h) for any legal purpose or program of the authority,
including without limitation the payment of the cost of issuing
authority bonds and notes and authority administrative costs and
expenses.
In addition, the authority may use the economic development
fund to purchase, lease, or license technology-related products
for education or training or to participate in programs where
technology-related products are purchased, leased, or licensed.
(g) The authority may create separate accounts within any
of the fund funds for use in accordance with the separate
purposes listed in this section and may irrevocably pledge and
allocate moneys on deposit in any of the fund funds to the
accounts for the purposes. The authority may make contracts
with note and bond holders, trustees for them, financial
institutions, or other persons interested in the disposition of
moneys in the fund funds or its their accounts with respect to
the conditions upon which money in the any fund or its accounts
is to be held, invested, applied, and disposed of and the use of
the fund and its accounts and the termination of accounts. The
authority may determine to leverage amounts in accounts to be
used to guarantee or insure bonds and notes of the authority or
loans to eligible small businesses and may covenant as to the
rate of leveraging with holders of the authority's bonds and
notes or any trustee for them, financial institutions, or other
persons. Money in the fund funds and its their accounts shall,
consistent with contracts with holders of the authority's bonds
and notes or any trustee for them, financial institutions, or
other interested persons, be invested in accordance with section
116J.91, subdivision 15, and the investment income from them,
absent contractual provisions to the contrary, shall be added to
and retained in the fund funds or its their accounts if provided
by the authority. The repayments to the authority of any direct
loans made by the authority from money in the fund funds or its
their accounts shall be paid by the authority into the
particular fund that was used in conjunction with the loan being
repaid, or, as provided by the authority, into an account. The
authority may collect fees, initially or from time to time, or
both, with respect to any direct loan it extends or any
insurance or guarantee it grants. The authority may enter into
contracts and security instruments with eligible small
businesses, with bond and note holders or any trustee for them,
or financial institutions or other persons to provide for and
secure the repayment to the authority of money provided by the
authority from the fund funds or its their accounts for direct
loans or which have been paid by the authority from the fund or
accounts pursuant to an authority guarantee or insurance.
The state covenants with all holders of the authority's
bonds and notes, financial institutions, and other persons
interested in the disposition of money in the fund funds or its
their accounts, which money the authority has irrevocably
pledged and allocated for any authorized purpose described in
this subdivision, that the state will not take any action to
limit the effect of the pledge and allocation and will not take
any action to limit the effect of contracts entered into as
authorized in this subdivision with respect to the pledge and
allocation and will not limit or alter the rights vested in the
authority or the state to administer the application of money
pursuant to the pledge and allocation and to perform its
obligations under the contracts. The authority may include and
recite this covenant of the state in any of its bonds or notes
benefitting from the pledge and allocation or contracts or
related documents or resolutions;.
(h) to enter into contract with note and bond holders or
other persons interested in the disposition of the fund; and
(i) for any legal purpose or program of the authority,
including without limitation the payment of the cost of issuing
authority bonds and notes and authority administrative costs and
expenses.
Sec. 4. Minnesota Statutes 1983 Supplement, section
116J.89, subdivision 1b, is amended to read:
Subd. 1b. [ECONOMIC DEVELOPMENT FUNDS; PREFERENCES.] (a)
The following eligible small businesses have preference among
all business applicants for financial assistance from the
economic development fund:
(1) businesses located in areas of the state that are
experiencing the most severe unemployment rates in the state;
(2) eligible small businesses that are likely to expand and
provide additional permanent employment;
(3) businesses located in border communities that
experience a competitive disadvantage due to location;
(4) businesses that have been unable to obtain traditional
financial assistance due to a disadvantageous location, minority
ownership, or other factors rather than due to the business
having been considered a poor financial risk;
(5) businesses that utilize state resources, thereby
reducing state dependence on outside resources, and that produce
products or services consistent with the long-term social and
economic needs of the state;
(6) businesses located in designated enterprise zones, as
described in section 273.1312, subdivision 4; and
(7) business located in federally designated economically
distressed areas.
(b) Except in connection with the issuance of authority
bonds or notes, the authority may not invest the fund funds in a
program that does not have financial participation from the
private sector, as determined by the authority.
Sec. 5. Minnesota Statutes 1983 Supplement, section
116J.89, subdivision 1c, is amended to read:
Subd. 1c. [CREATION OF ECONOMIC DEVELOPMENT FUND.] There
is created the economic development fund to be administered by
the authority. All money in the fund is appropriated to the
authority to accomplish the authority's business development
purposes.
The money in the economic development fund must be used as
provided in sections 116J.65, 116J.67, 116J.875 to 116J.926, and
chapters 472 and 474, to provide financial assistance to
businesses, eligible small businesses, targeted small
businesses, and farm businesses. This financial assistance
includes business loans, pollution control loans, small business
loans, and farm loans and the purchasing, leasing, or licensing
of technology-related products or rights to the products.
Sec. 6. Minnesota Statutes 1983 Supplement, section
116J.89, subdivision 2, is amended to read:
Subd. 2. [PUBLIC PURPOSES.] Sections 116J.88 to 116J.91
and sections 116J.921 116J.875 to 116J.926 are enacted to
promote the welfare and prosperity of the state by maintaining
and increasing the career and job opportunities of its citizens;
by reducing, controlling, and preventing environmental pollution
and waste of energy and other resources; and by protecting and
enhancing the tax base on which state and local governments
depend for the financing of public services.
Sec. 7. Minnesota Statutes 1982, section 116J.89,
subdivision 4, is amended to read:
Subd. 4. The state pledges and agrees with all holders of
obligations of the agency authority that it will not limit or
alter the rights vested in the agency authority to fulfill their
terms, and will not in any way impair the rights or remedies of
the holders, until all of the obligations and interest on them,
with interest on any unpaid installments of interest and all
costs and expenses in connection with any action or proceeding
by or on behalf of such holders to enforce the payment and other
provisions of the obligations, are fully met and discharged.
The agency authority is authorized to include and recite this
pledge and agreement of the state in any obligation or related
document.
Sec. 8. Minnesota Statutes 1983 Supplement, section
116J.89, subdivision 6, is amended to read:
Subd. 6. The property of the agency authority and its
income and operation shall be exempt from all taxation by the
state or any of its political subdivisions.
Sec. 9. Minnesota Statutes 1983 Supplement, section
116J.89, subdivision 8, is amended to read:
Subd. 8. [MEMBERSHIP.] The members and governing body of
the authority shall be the commissioner and ten other members
appointed by the governor. The governor shall designate the
chairman from among the members. The board shall elect a
secretary and other officers as it deems fit from among its
members. On July 1, 1983, the governor shall have authority to
appoint new members. The terms of the current members shall
expire, respectively, when they are replaced and new members are
appointed by the governor and qualified. Section 15.0575
governs the terms, compensation, removal and filling of
vacancies in the offices of members other than the commissioner.
Sec. 10. Minnesota Statutes 1983 Supplement, section
116J.90, subdivision 1, is amended to read:
Subdivision 1. [GENERALLY.] The authority may make or
purchase or participate with financial institutions in making or
purchasing business loans, small business loans, energy loans,
pollution control loans, and farm loans upon the conditions
described in this section, and may enter into commitments
therefor.
Sec. 11. Minnesota Statutes 1983 Supplement, section
116J.90, subdivision 2, is amended to read:
Subd. 2. [SMALL BUSINESS LOANS; LIMITATIONS.] The
authority may make or purchase or participate with financial
institutions in making or purchasing small business loans not
exceeding $1,000,000 in principal amount with respect to small
business loans made or purchased by the authority and not
exceeding $1,000,000 principal amount with respect to the
authority's share thereof when the authority participates in
making or purchasing small business loans.
With respect to business loans that the authority makes or
purchases or participates with, the authority may determine or
provide for their servicing, the percentage of authority
participation, if any, the times the loans or participations
shall be payable and the amounts of payment, their amount and
interest rates, their security, if any, and other terms,
conditions, and provisions necessary or convenient in connection
with them and may enter into all necessary contracts and
security instruments in connection with them. The authority
shall obtain the best available security for all loans. The
authority may provide for or require the insurance or
guaranteeing of the business loans or authority participations
in whole or in part by the federal government or a department,
agency, or instrumentality of it, by an appropriate account
created with respect to the economic development fund in
connection with business loans, small business loans, pollution
control loans, and farm loans, and with respect to the energy
development fund in connection with energy loans, or by a
private insurer. In connection with making or purchasing
business loans or participations in them, the authority may
enter into commitments to purchase or participate with financial
institutions or other persons upon the terms, conditions, and
provisions determined by it. Business Loans or participations
may be serviced by financial institutions or other persons
designated by the authority. The dollar limitations contained
in this subdivision do not apply to energy loans and loans
insured under sections 93 116J.924 and 94 116J.925.
Sec. 12. Minnesota Statutes 1983 Supplement, section
116J.90, subdivision 3, is amended to read:
Subd. 3. [DIRECT BUSINESS AND FARM LOANS; LIMITATIONS.]
The authority may make business loans or farm loans not
exceeding $100,000 in principal amount, at interest rates and
subject to terms determined by the authority, provided that each
loan shall be made only from the proceeds of a bond or note
payable in whole or part from the repayments of principal and
interest on the loan. The loans may also be guaranteed or
insured by money on deposit in the economic development fund or
any special account of it, and may be secured by reserve funds
and other collateral and available money as determined by the
authority. The authority may enter into all necessary contracts
and security instruments in connection with them. The
limitation on loan amounts in this subdivision does not apply to
energy loans and loans insured under sections 93 and 94 any
other loan authorized under the Minnesota Energy and Economic
Development Authority Act.
Sec. 13. Minnesota Statutes 1983 Supplement, section
116J.90, subdivision 5, is amended to read:
Subd. 5. [TARGETED LOANS.] The authority shall make every
effort to assure that at least 50 percent of the principal
amount of the loans made or purchased by the authority in each
fiscal year consists of loans with a principal amount of
$100,000 or less to targeted small businesses as defined in
section 116J.88, subdivision 5, and the financial management
division shall provide technical assistance needed by targeted
small businesses to complete applications and meet other
requirements for those loans. The authority shall report to the
legislature annually on or before February 1 as to its
compliance with the requirements of this subdivision during the
preceding fiscal year. Noncompliance with this subdivision does
shall not affect the validity of bonds and notes heretofore or
hereafter issued.
Sec. 14. Minnesota Statutes 1982, section 116J.90, is
amended by adding a subdivision to read:
Subd. 5a. [SPECIAL ASSISTANCE PROGRAM.] (a) The authority
may operate a special assistance program and may designate
certain businesses as being in need of special assistance. In
connection with the special assistance program the authority may
borrow money and may issue negotiable bonds and notes in
accordance with section 116J.91, subdivisions 11 and 12.
Notwithstanding any provision to the contrary in section
116J.91, subdivision 11, the aggregate principal amount of the
authority's bonds and notes outstanding at any one time and
issued in connection with the special assistance program,
excluding the amount satisfied and discharged by payment and
deducting amounts held in debt service reserve funds and amounts
used to make loans guaranteed or insured by the federal
government or a department, agency, or instrumentality of the
federal government or by a private insurer or guarantor
authorized to do business in the state of Minnesota and
acceptable to the authority, shall not exceed $10,000,000.
(b) No business shall be eligible to receive special
assistance unless the authority has first passed a resolution
designating the business as being in need of special
assistance. The resolution shall include findings that the
designation and receipt of the special assistance will be of
exceptional benefit to the state of Minnesota in that at least
three of the following criteria are met:
(1) in order to expand or remain in Minnesota, the business
has demonstrated that it is unable to obtain suitable financing
from other sources;
(2) special assistance will enable a business not currently
located in Minnesota to locate a facility within Minnesota which
directly increases the number of jobs within the state;
(3) the business will create or retain significant numbers
of jobs within a community in Minnesota;
(4) the business has a significant potential for growth in
jobs or economic activities within Minnesota within the ensuing
five-year period; and
(5) the business will maintain a significant level of
productivity within Minnesota within the ensuing five-year
period.
(c) Special assistance may include:
(1) a business loan;
(2) a small business loan; or
(3) use of moneys in the economic development fund to
provide financial assistance to businesses in accordance with
section 116J.89, subdivision 1a, except that section 116J.89,
subdivision 1a(g), shall apply only to eligible small businesses.
Sec. 15. Minnesota Statutes 1983 Supplement, section
116J.90, subdivision 6, is amended to read:
Subd. 6. [REPORTS.] (a) Each financial institution that
participates in a pollution control or business loan with the
authority shall annually on or before March 1 submit a report
for the prior calendar year to the authority on a form
prescribed by the state auditor commissioner. The report shall
include a listing of each new and outstanding loan in which the
financial institution is a participant, the amount and terms of
the loan, the purpose of the loan, and any other information as
the state auditor commissioner may reasonably require.
(b) The authority shall annually on or before May 1 submit
a report on a form prescribed by the state auditor commissioner
for the prior calendar year to the state auditor on all loans
that it makes, purchases, or participates in. The report shall
include a listing of each new and outstanding loan in which the
financial institution is a participant, the amount and terms of
the loan, the purpose of the loan, and any other information as
the state auditor may reasonably require.
(c) The state auditor shall annually on or before July 1
submit a report for the prior calendar year to the governor and
the legislature summarizing the report submitted pursuant to
clause (b).
(d) The cost of preparing and submitting the reports
required by this subdivision shall be borne by the party
submitting it. Any financial institution that fails to comply
with the requirements of this subdivision shall be prohibited
from participating in future loans until it complies.
Sec. 16. Minnesota Statutes 1983 Supplement, section
116J.91, subdivision 1, is amended to read:
Subdivision 1. In implementing the purposes and the
programs described in sections 116J.88 to 116J.91 116J.65,
116J.67, 116J.875 to 116J.926, and chapters 472 and 474, the
authority shall have the powers and duties set forth in this
section.
Sec. 17. Minnesota Statutes 1983 Supplement, section
116J.91, subdivision 4, is amended to read:
Subd. 4. It may adopt, amend, and repeal rules, including
temporary rules, not inconsistent with the provisions of
sections 116J.88 to 116J.91 116J.65, 116J.67, 116J.875 to
116J.926, and chapters 472 and 474 as necessary to effectuate
its purposes. The authority to adopt temporary rules expires
June 30, 1985.
Sec. 18. Minnesota Statutes 1983 Supplement, section
116J.91, subdivision 11, is amended to read:
Subd. 11. It may borrow money to carry out and effectuate
its purposes and may issue its negotiable bonds or notes as
evidence of any such borrowing in accordance with sections
462A.08 to 462A.13, 462A.16 and 462A.17, all with the force and
effect stated and the incidental powers granted and duties
imposed in those sections. The bonds and notes may be issued
pursuant to a trust indenture that is substantially identical to
a resolution pursuant to which the authority issues bonds and
notes as provided in sections 462A.08 to 462A.13, 462A.16, and
462A.17, except that the authority may pledge money and
securities to a trustee for the security of the holders of bonds
and notes. The authority may refund bonds and notes and may
guarantee or insure its bonds and notes in whole or in part with
money from the economic development fund funds or an account
created by the authority for that purpose. The aggregate
principal amount of the authority's bonds and notes outstanding
at any one time, excluding the amount satisfied and discharged
by payment or provision for payment in accordance with their
terms, and deducting amounts held in debt service reserve funds
therefor and amounts used to make loans guaranteed or insured by
the federal government or a department, an agency or
instrumentality of the federal government or by a private
insurer or guarantor authorized to do business in the state of
Minnesota and acceptable to the authority, shall not exceed
$30,000,000 unless authorized by another law.
Sec. 19. Minnesota Statutes 1983 Supplement, section
116J.91, subdivision 12, is amended to read:
Subd. 12. It may issue and sell bonds, notes, and other
obligations payable solely from particular moneys, assets, or
revenues derived from its programs, or any business loan, farm
loan, or pollution control loan, notwithstanding section
462A.08, subdivision 3. Obligations issued to participate in
making or purchasing business loans or pollution control loans
shall be payable solely from revenues derived by the authority
from repayments of these loans and from enforcement of the
security therefor, or from a debt service reserve fund or funds,
or from a general reserve fund or from a segregated portion
thereof, or from other funds or security specifically pledged by
the authority, irrevocably pledged and appropriated to pay
principal and interest due, for which other funds are not
available. A general reserve fund is created and is eligible to
receive direct appropriations from the state treasury or a
transfer from any of the economic development fund funds as the
authority may provide by resolution. The authority may
irrevocably pledge and appropriate all or a segregated portion
of the general reserve fund to pay principal and interest due on
all or one or more series of its obligations for which other
funds are not available, pursuant to the terms and conditions
that the authority shall determine. Until so pledged and
appropriated by the authority the general reserve fund shall not
be available to pay principal and interest on the authority's
obligations. The authority may at its option provide by
resolution that obligations issued to participate in making or
purchasing business loans or pollution control loans be secured
at the time of issuance in whole or in part by a debt service
reserve fund or funds, a portion of the general reserve fund
segregated to secure one or more series of bonds, or the portion
of the general reserve fund not segregated to secure one or more
series of bonds. The operation of the debt service reserve fund
or funds or a segregated portion of the general reserve fund and
other relevant terms or provisions shall be determined by
resolution or indenture of the authority. Obligations issued to
make or purchase business loans, farm loans, or pollution
control loans may be issued pursuant to an indenture of trust or
a resolution of the authority. It may pledge to holders of
obligations, or to a trustee, repayments from the loans, any
security or collateral for them, contract rights with respect to
them, and any other funds or security specifically pledged by
the authority for them.
Sec. 20. Minnesota Statutes 1982, section 116J.91,
subdivision 15, is amended to read:
Subd. 15. It may cause any funds not required for
immediate disbursement, including the general reserve fund, to
be invested in direct obligations of or obligations guaranteed
as to principal and interest by the United States, or in insured
savings accounts, up to the amount of the insurance, in any
institution the accounts of which are insured by the federal
savings and loan insurance corporation or to be deposited in a
savings or other account in a bank insured by the federal
deposit insurance corporation or to be invested in time
certificates of deposit issued by a bank insured by the federal
deposit insurance corporation and maturing within one year or
less and in the investments described in section 11A.24,
subdivision 4, except clause (d) of subdivision 4. It may
deposit funds in excess of the amount insured with security as
provided in chapter 118. Notwithstanding the foregoing, it may
invest and deposit funds into accounts established pursuant to
resolutions or indentures securing its bonds or notes in such
investments and deposit accounts or certificates, and with such
security, as may be agreed therein with the holders or a trustee
for the holders.
Sec. 21. Minnesota Statutes 1983 Supplement, section
116J.91, subdivision 16, is amended to read:
Subd. 16. It may provide general consultative and
technical services to assist in financing small business
facilities for the businesses to which loans may be made. It
may enter into agreements or other transactions concerning the
receipt or provision of those services.
Sec. 22. Minnesota Statutes 1982, section 116J.91,
subdivision 17, is amended to read:
Subd. 17. Financial information, including, but not
limited to, credit reports, financial statements and net worth
calculations, received or prepared by the agency authority
regarding any agency authority loan, financial assistance, or
insurance is private data with regard to data on individuals as
defined in section 13.02, subdivision 9 and non-public data with
regard to data not on individuals as defined in section 13.02,
subdivision 12.
Sec. 23. Minnesota Statutes 1982, section 116J.91,
subdivision 18, is amended to read:
Subd. 18. It The authority may accept appropriations,
gifts, grants, bequests, and devises and use or dispose of them
for its corporate purposes. All gifts, grants, bequests, and
revenues from those sources are appropriated to the authority
for the purposes of sections 116J.65, 116J.67, and 116J.875 to
116J.926. The funding may include, but is not limited to,
voluntary public utility investments and expenditures as
provided by a utility and submitted in a program approved by the
public utilities commission under section 216B.241. Any
voluntary investments or expenditures or gifts by a utility as
described in this subdivision shall be appropriated to the
authority only for purposes of sections 116J.921 to 116J.926.
Sec. 24. Minnesota Statutes 1983 Supplement, section
116J.91, subdivision 19, is amended to read:
Subd. 19. Proceeds of the authority's bonds, notes, and
other obligations; amounts granted or appropriated to the agency
authority for the making or purchase or the insurance or
guaranty of loans or for bond reserves; income from investment;
money in the economic development fund funds; and all revenues
from loans, fees, and charges of the authority including
rentals, royalties, dividends, or other proceeds in connection
with technology-related products, energy conservation products,
or other equipment are annually appropriated to the agency
authority for the accomplishment of its corporate purposes and
shall be expended, administered, and accounted for in accordance
with the applicable provisions of all bond and note resolutions,
indentures, and other instruments, contracts, and agreements of
the agency. Notwithstanding section 16A.28, these
appropriations are available until expended.
Sec. 25. Minnesota Statutes 1982, section 116J.91, is
amended by adding a subdivision to read:
Subd. 19a. The authority may receive payments in the form
of royalties, dividends, or other proceeds in connection with
technology-related products, energy conservation products, or
other equipment which it has purchased or in which it has
participated.
Sec. 26. Minnesota Statutes 1983 Supplement, section
116J.91, subdivision 20, is amended to read:
Subd. 20. The authority may do all things necessary and
proper to fulfill its purpose and the purposes of the economic
development fund as provided in sections 116J.65, 116J.67,
116J.88 to 116J.91, sections 116J.921 116J.875 to 116J.926, and
chapters 472 and 474.
Sec. 27. Minnesota Statutes 1983 Supplement, section
116J.923, subdivision 7, is amended to read:
Subd. 7. [LOANS TO MUNICIPALITIES.] The authority shall
receive approve applications from municipalities for loans to
finance improvements to public buildings for the purpose of
energy conservation, reduction of the use of conventional energy
sources, or the use of alternative energy resources, and make
recommendations thereon to the commissioner of finance, in the
event of the authorization and issuance of bonds of the state
for this purpose. Financial and technical support for this
program shall be provided by the financial management division.
This program shall include the district heating loan program
established in section 116J.36 and the program of energy
improvement loans to schools created by Laws 1983, chapter 323.
Sec. 28. Minnesota Statutes 1983 Supplement, section
116J.924, subdivision 3, is amended to read:
Subd. 3. [INSURANCE OF LOANS.] (a) [AUTHORIZATION.] The
authority is authorized, upon application by a lender financial
institution, to insure loans for cost-effective qualified energy
projects as provided in this section; and under terms as the
authority may prescribe by rule, to make commitments for the
insuring of loans prior to the date of their execution or
disbursement. In the event the authority shall determine that
the energy loan insurance fund is or will be depleted in
connection with the use of the fund as authorized by the act
which has been approved or given preliminary approval by the
authority, then the authority may by resolution transfer money
from the energy development fund created pursuant to section
116J.925.
(b) [ELIGIBILITY REQUIREMENTS.] The authority may by rule
establish requirements for energy loans to be eligible for
insurance under this section, relating to:
(1) maximum principal amount, amortization schedule,
interest rate, delinquency charges, and other terms;
(2) the portion of the loan to be insured;
(3) acceleration and other remedies;
(4) covenants regarding insurance, repairs, and maintenance
of the project;
(5) conditions regarding subordination of the loan
security, if any, of the project to other liens against the
property;
(6) the aggregate principal amount of loans to be insured
in relation to the reserves from time to time on hand in the
insurance fund, and priorities as to the loans to be insured;
and
(7) any other matters determined by the authority.
The authority shall by rule establish criteria for
analyzing the cost-effectiveness of projects.
(c) [CONCLUSIVE EVIDENCE OF INSURABILITY.] Any contract of
insurance executed by the authority under this section shall be
conclusive evidence of the eligibility of the loan for
insurance, and the validity of any contract of insurance
properly executed and in the hands of any approved lender shall
not be contestable, except for fraud or misrepresentation on the
part of the lender financial institution.
(d) [PREMIUMS.] The authority is authorized to fix premium
charges for the insurance of loans under this section at levels
which in its judgment, taking into account other amounts
available in the fund, will be sufficient to cover and maintain
a reserve for loan losses.
(e) [PROCEDURES UPON DEFAULT.] The authority may establish
procedures to be followed by lenders financial institutions and
to be taken by the authority in the event of default upon an
energy loan, including:
(1) time for filing claims;
(2) rights and interests to be assigned and documents to be
furnished by the lender financial institution;
(3) principal and interest to be included in the claim; and
(4) conditions, if any, upon which the authority will pay
the entire principal amount in default, after foreclosure and
receipt of marketable title to the property.
Sec. 29. Minnesota Statutes 1983 Supplement, section
116J.925, subdivision 1, is amended to read:
116J.925 [ENERGY LOAN PROGRAM DEVELOPMENT FUND.]
Subdivision 1. [AUTHORITY TO MAKE ENERGY LOANS.] The
authority may make energy loans to individuals, partnerships,
corporations, or other entities a business for the financing of
capital improvements to be used in connection with a trade or
business if the principal purpose of improvement is energy
conservation, to reduce the usage of conventional fuels as a
source of energy, or to develop Minnesota's alternative energy
resources as provided by the authority's rules a qualified
energy project.
Sec. 30. Minnesota Statutes 1983 Supplement, section
116J.925, subdivision 3, is amended to read:
Subd. 3. [ENERGY DEVELOPMENT FUND.] An energy development
fund is created and is eligible to receive appropriations. The
authority may irrevocably pledge and appropriate all or a
segregated portion of the energy development fund to make
principal and interest payments when due on all or one or more
series of its obligations for which other funds are not
available, pursuant to the terms and conditions the authority
shall prescribe. Unless the energy development fund has been
pledged and appropriated to secure the obligations, the energy
development fund shall not be available to make principal or
interest payments on the obligations The authority may otherwise
operate the fund according to section 116J.89. In the event the
authority shall determine that the energy development fund is or
will be depleted in connection with the use of the fund as
authorized by the act which has been approved or given
preliminary approval by the authority, then the authority may by
resolution transfer money from the energy loan insurance fund
created pursuant to section 116J.924.
Sec. 31. [116M.01]
Sections 116J.62; 116J.65; 116J.67; 116J.88; 116J.89;
116J.90; 116J.91; 116J.921; 116J.923; 116J.924; 116J.925; and
116J.926 may be cited as the Minnesota Energy and Economic
Development Authority Act.
Sec. 32. Minnesota Statutes 1983 Supplement, section
275.125, subdivision 12a, is amended to read:
Subd. 12a. [ENERGY CONSERVATION LEVY.] The school district
may annually levy, without the approval of a majority of the
voters in the district, an amount equal to the actual costs of
the energy conservation investments for the purposes of repaying
sufficient to repay the annual principal and interest of the law
loan made pursuant to section 116J.37.
Sec. 33. Minnesota Statutes 1982, section 474.01,
subdivision 7, is amended to read:
Subd. 7. Any municipality or redevelopment agency
contemplating the exercise of the powers granted by this chapter
may apply to the commissioner of energy, planning and economic
development for information, advice, and assistance. The
commissioner is authorized to handle such preliminary
information in a confidential manner, to the extent requested by
the municipality.
Sec. 34. Minnesota Statutes 1982, section 474.01,
subdivision 7a, is amended to read:
Subd. 7a. No municipality or redevelopment agency shall
undertake any project authorized by this chapter, except a
project referred to in section 474.02, subdivision 1f, unless
its governing body finds that the project furthers the purposes
stated in this section, nor until the commissioner of energy,
planning and economic development has approved the project, on
the basis of preliminary information which the commissioner may
require, as tending to further the purposes and policies of this
chapter. Approval shall not be deemed to be an approval by the
commissioner of energy, planning and economic development or the
state of the feasibility of the project or the terms of the
revenue agreement to be executed or the bonds to be issued
therefor, and the commissioner shall state this in communicating
approval.
Sec. 35. Laws 1983, chapter 323, section 5, subdivision 2,
is amended to read:
Subd. 2. None of the appropriations made in this section
shall lapse until the purpose for which it is made has been
accomplished or abandoned. The amount of each loan approved for
disbursement shall be and remain appropriated for that purpose
until the loan is fully disbursed or part or all of it is
revoked by the energy division authority.
Sec. 36. [INSTRUCTIONS TO REVISOR.]
Subdivision 1. [CHANGE OF TERMS.] The revisor of statutes
shall change the words "development revolving fund" or
"revolving fund" to "Minnesota Fund" whenever they appear in
Minnesota Statutes, chapter 472.
Subd. 2. [RENUMBERING.] The revisor of statutes shall
renumber each section specified in column A with the number in
column B. The revisor shall also make the necessary
cross-reference changes consistent with this renumbering.
Column A Column B
116J.62 116M.03
116J.65 116M.04
116J.67 116M.05
116J.88 116M.02
116J.89 116M.06
116J.90 116M.07
116J.91 116M.08
116J.921 116M.09
116J.923 116M.10
116J.924 116M.11
116J.925 116M.12
116J.926 116M.13
Sec. 37. [REPEALER.]
Minnesota Statutes 1983 Supplement, sections 116J.922;
116J.923, subdivisions 2 and 12; and 116J.924, subdivision 1,
are repealed.
Approved April 26, 1984
Official Publication of the State of Minnesota
Revisor of Statutes